8-K 1 v350138_8k.htm 8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

 

FORM 8-K

 

Amendment No.

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported):    July 15, 2013

 

BOOMERANG SYSTEMS, INC.
(Exact Name of Registrant as Specified in Charter)

 

Delaware   000-10176   22-2306487
(State or Other Jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification No.)

 

30 B Vreeland Road, Florham Park, NJ 07932
(Address of Principal Executive Offices)

 

Registrant's telephone number, including area code:   (973) 538-1194

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On July 12, 2013, Boomerang Systems, Inc. (the “Company”), and its wholly-owned subsidiaries Boomerang Sub, Inc., Boomerang USA Corp. and Boomerang MP Holdings Inc. (collectively with the Company, the “Borrowers” and individually, a “Borrower”), entered into Amendment No. 1 (the “Amendment”) to the Loan Agreement (defined below) with 49 incremental Lenders (defined below). Pursuant to the Amendment, the additional Lenders (together with increased commitments from two Lenders) committed to fund an additional $3,025,000 principal amount of loans to the Borrowers, bringing aggregate commitments under the Loan Agreement to $7,775,000.

 

On June 11, 2013 (the “Initial Closing Date”), the Borrowers entered into a Loan and Security Agreement (the “Loan Agreement”) dated as of June 6, 2013 with lenders who became a lender party thereto (together with any party which subsequently becomes a lender party, the “Lenders” and, individually, a “Lender”) and the Agent (as defined in the Loan Agreement). Pursuant to the Loan Agreement, Lenders committed to fund $4,750,000 amount of loans to the Borrowers. The Loan Agreement contemplates that the aggregate principal amount of borrowings may be increased to $10,000,000 through commitments from additional Lenders who subsequently become a party to the Loan Agreement.

 

Each of the material agreements relating to the loan transaction, as amended by Amendment No. 1, is summarized in greater detail below. The descriptions of these agreements do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, all of which are filed as exhibits to this Report or filed with the Current Report on Form 8-K filed with the SEC on June 17, 2013. These agreements have been included to provide investors and security holders with information regarding their respective terms. The description is not intended to provide any other factual information about the Company or the other parties thereto. The agreements contain representations and warranties the parties thereto made to, and solely for the benefit of, the other parties thereto. Accordingly, investors and security holders should not rely on the representations and warranties as characterizations of the actual state of facts, since they were only made as of the date of such agreements. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the agreements, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

 

A Lender which is not an affiliate of the Company (the “Non-Affiliate Lender”), committed to fund $3,000,000 principal amount of loans, and 11 Lenders, each of which is an affiliate of the Company or designated as an affiliate of the Company for purposes of the Loan Agreement (the “Affiliate Lenders”), committed to fund $1,750,000 principal amount of loans. On the Initial Closing Date, the Non-Affiliate Lender advanced $1,000,000 to the Company, for which it received $1,000,000 principal amount of notes and the Affiliate Lenders advanced $1,000,000 to the Company for which they received $1,000,000 principal amount of notes (the notes issued on the Initial Closing Date, together with any additional notes issuable under the Loan Agreement are referred to as the “Notes”). The Company, as Borrowing Agreement for the Borrowers, may request additional advances from the Lenders (in a minimum amount of $200,000 per request) by specifying the amount of the requested advance and the use of proceeds thereof.

 

 
 

 

The Notes bear interest at the rate of 15% per annum, payable upon maturity. The maturity date of the Notes is May 31, 2016, subject to earlier prepayment upon acceleration of the occurrence of an event of default (as defined in the Loan agreement); provided further that the Company may prepay the Notes at any time without penalty.

 

Pursuant to the Loan Agreement, the Borrowers assigned, pledged and granted to the Lenders a security interest in substantially all of their respective assets, including their respective intellectual property, accounts, receivables, general intangibles, equipment, inventory, all of the proceeds and products of the foregoing and the Company’s equity interests in the other Borrowers.

 

As partial consideration for providing advances under the Loan Agreement, the Company agreed to issue to each Lender warrants (the “Warrants”) to purchase 20,000 shares of its common stock for each $100,000 advanced. On the Initial Closing Date, the Company issued Warrants to purchase an aggregate of 400,000 shares of common stock. The Warrants are exercisable at $5.00 per share (the “Exercise Price”), subject to full ratchet adjustment for issuance below the exercise price, subject to certain exceptions. Additionally, the Exercise Price may not be adjusted below $1.00. Cashless exercise is permitted if the average trading volume of the Company’s Common Stock during at least five (5) of the ten (10) consecutive trading days immediately preceding the date of the notice of exercise is at least 10,000 shares, and will be based upon the average of the last sale price of the Common Stock during such five (5) consecutive trading day period. The Warrants expire on June 6, 2018.

 

The following related parties of the Company participated as Affiliate Lenders on the Initial Closing Date:

 

Name  Commitment   Amount Funded On
   the Closing Date  
   Aggregate Number
of Warrants Issuable
   Warrants Issued
On Closing Date
 
                     

The Estate of

Gene Mulvihill(1)

  $500,000   $285,714    100,000    57,143 
                     

Sunset Marathon

Partners LLC(2)

  $250,000   $142,857    50,000    28,571 
                     

MRP Holdings

LLC(3)

  $100,000   $57,143    20,000    11,426 
                     

Burton I.

Koffman(4)

  $750,000   $428,571    150,000    85,712 
                     

 

(1)Gail Mulvihill and Andrew Mulvihill, the co-administrators of the estate, exercise voting and investment power over the shares issuable upon exercise of the Warrants. Gail Mulvihill is a principal stockholder of the Company and mother of Christopher Mulvihill, the Company’s President and a principal stockholder of the Company. Andrew Mulvihill is a brother of Christopher Mulvihill.

 

(2)James Mulvihill, a principal stockholder of the Company, has voting and investment power over the shares issuable upon exercise of the Warrants and is a brother of Christopher Mulvihill.

 

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(3)MRP Holdings LLC is owned by Mark Patterson, the Chief Executive Officer and a director and principal stockholder of the Company.

 

(4)Directly and indirectly through entities he controls and by members of his family and entities they control, Mr. Koffman is a principal stockholder of the Company.

 

On July 15, 2013, MRP Holdings LLC increased its aggregate commitment to $200,000 and Anthony Miele, III, a director of the Company, Alexandria Equities, LLC, a principal stockholder of the Company, and Albert Behler, a principal stockholder of the Company, became Lenders and committed to fund $25,000, $200,000 and $200,000, respectively.

 

A majority of the principal amount of each series of convertible notes (due 2016, June 2017 and December 2017) consented to the Company’s entering into the Loan Agreement and increasing the secured indebtedness under the Loan Agreement, and acknowledged that the secured indebtedness under the Notes is senior in right of payment and otherwise to the convertible notes.

 

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth under Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.

 

Item 8.01.  Other Events

 

Following the Initial Closing Date, the Company commenced implementation under its BrickellHouse project.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    BOOMERANG SYSTEMS, INC.
     
     
     
Date: July 16, 2013   By: /s/ Mark R. Patterson
        Mark R. Patterson
        Chief Executive Officer

 

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